Should i take 100% while its on offer?

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belini

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Hi everyone, would appreciate your advice on my situation. I own an apartment and am planning to buy a house with my fiancee. We dont have enough money for stamp duty at the moment and have seen a new build with no stamp duty that we are interested in and plan to rent out my apartment. My question is this: Should we take the 100% mortgage thats on offer now in case it is impossible to get 100% this time next year, due to the current credit crunch or wait a year or two when we might have the stamp duty to buy second hand in our preferred location but risk not getting a 100% mortgage and would have to save for another few years.
Thanks
 
Don't think I could sell it at the moment. Ca't afford to drop the price too much either as mortgage is only around 15k less than current market value
 
Have you quantified how much risk you're taking on? An apt at virtually 100% and a new house at 100%.

You do know if that you'll have to pay clawback stamp duty once you rent out your apt? (At virtually 100% I'm assuming you bought withinin the last 2 years)
 
Bought it nearly 5 years go but remortgaged two years ago to buy my sister out, paid her off at the then market value of 380k. Think I'd be lucky to get 330k for it at the moment. Not liable for clawback. Am concerned though about whether the rental market will go belly up and will be left with an empty apartment and a new house!
 
It's a tough situation but getting into more debt, well, it wouldn't be for me.

Without a doubt banks will not entertain your situation within even a relatively short period of time (I'm surprised they offered 100% as it is). But there's a good reason why they won't - just too risky, even for them.

What bank btw?
 
AIB. Only getting it on the basis that the amount we're looking to borrow is a significantly lower percentage of our incomes end than the threshold they set- if that makes sense..
 
Curious on this one. Say you do manage to rent out the apartment and take on a new mortgage. Surely this will increase your outgoings by something like €500pm or more?

I often wonder how someone can suddenly afford an extra €500pm to buy a place but not have been in a position to put away this amount in savings prior to this.
 
Really it sounds like an awful amount of debt to get burdened with. Realistically if you haven;t got the stamp duty money, imagine what it would be like in three of four months, with two mortgages (the apt mort. will be at a higher rate as it is going to BTL). Very Very risky in this market
 
hi,it sounds like because your circumstances have changed,you now want a house with your fiance... are you looking for a house for a long time to maybe start a family in.... if so it may be better to get rid of the apt and go for a house together and start fresh,i sometimes feel like you never know what is going to balance out the other with regard to keeping the apt because of the current climate and just selling and moving on and having one morgage and one combined outgoing,that way you can get on your feet and in 5+ years time when salaries are higher you can upgrade to a bigger family house... im no legal eagal with regards to finances but im just im in a similar situation weighing up options at the mo.....
 
Perhaps I've misread the thread...but 100% mortgages....I taught these were extinct a long time ago with the credit crunch?
 
belini said:
Bought it nearly 5 years go but remortgaged two years ago to buy my sister out, paid her off at the then market value of 380k. Think I'd be lucky to get 330k for it at the moment. Not liable for clawback. Am concerned though about whether the rental market will go belly up and will be left with an empty apartment and a new house!
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Don't assume that the price of the apartment will recover. It might recover over 2-3 years, but then again, it might not. You need to take this into account in your planning.
 
If the OP is already in negative equity with the apartmment then they don't have the option of selling unless the banks would give them a greater than 100% mortgage!

This sounds like a sticky situation as the rent is unlikely to cover the mortgage repayments on the apartment, (or is it?) So if you sell it you owe the bank money and if you keep it and rent it out you are paying extra on top of the rent to make the mortgage repayments, on top of your new mortgage.

If you stay put you risk the apartment falling further in value, (not discussing h.p.s but this seems to be the consenus for the next year or more).

I hope someone can come up with an answer for these folks, I'm stumped.
 
If I were in your situation I'd stay in apartment, have fiancee move in there with you and contribute to the mortgage payments so that you'd be paying more per month into your mortgage than you are now. Also it means you can both save money towards a deposit in the future and increase the equity in your current property. Just a suggestion!
 
I note from your first post that the second option is to wait a year or two and save a few bob towards stamp duty etc and buy a house in your preffered location. I would think that that makes alot more sense as by them you will have decided what to do with the apt and how viable it would be to rent it out.

All mortgages 100% or not have to be paid back with interest. The lower the mortgage you have to get the cheaper it will be on you in the long run.
 
If I were in your situation I'd stay in apartment, have fiancee move in there with you and contribute to the mortgage payments so that you'd be paying more per month into your mortgage than you are now. Also it means you can both save money towards a deposit in the future and increase the equity in your current property. Just a suggestion!
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2nd that.
 
Thanks for your replies guys. Th reality is that between us we are saving 1000 euro a month at the moment for our wedding at the end of the year (after mortgage payments). I also have an outstanding loan of 320 a month that will be paid off at the end of the year. So I suppose we are relatively financial secure at the moment and would be in a position to supplement rental income on the apartment for a while and if worse comes to worse pay the mortgage in the short term if we had no tenants at any point, albeit we would have to live on bread and water with no social life! If we have children we will have to incorporate creche fees of 900 a month (not for at least two years though) so it could be hard at that point.
I'm toying between selling the apartment now or wait a year or two rather than take on the risk of two more or less 100% mortgages in the current climate, even though we could sustain both for a few months if worse came to worse....
 
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